In Kenya’s Ambolesi National Park, vegetable growers are
paid to allow elephants access to food sources on their
farms. Programs such as this seem like a win-win for
the environment and for farmers who want to earn a
living. But David Zilberman, professor of agricultural and
resources economics, has shown that increasingly popular
policies that offer “payments for environmental services,”
or PES, are a double-edged sword.

In a working paper entitled “Payments for Environmental Services:
Who Gains and Who Loses?” Zilberman breaks down
PES into three categories: pollution control, conservation, and
creation of services (for instance, planting trees for the
public good). While many PES programs have been
successful in the United States, he says, their effects on
impoverished countries are more complex.

PES can help alleviate poverty if poor farmers are given
subsidies for environmental projects. For example, a
farmer could be paid to let a field lie fallow to prevent soil
erosion. However, if land targeted for environmental projects
is owned by the wealthy, the poor receive no benefit.

Additionally, taking land out of production will lead to
fewer crops and higher food prices, and this could result
in farmers using more pesticides and farming erodible,
marginal land—thus negating the benefits of the
subsidy.

Along with potentially contributing to poverty on a regional
level, PES programs can be a drain on government resources.

“They may be abused as subsidies, and have minimal
environmental value,” says Zilberman. “There are cases
where political pressure and bad design resulted in PES
programs that spent large amounts of public money
on questionable activities.”

The key to avoiding the negative consequences of PES may
be safety net policies to ensure that the poor don’t slip
through the cracks.

“Impacts of PES programs have to be monitored on the
ground,” says Zilberman. “If PES may negatively affect
landless or poor consumers, some of the resources may
be aimed to protect them. PES is easier to implement in
countries with a safety net like food stamps or welfare.”

-Stephanie Ludwig

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